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SimCorp reports revenue growth of 29% and EBIT margin of 29% for the first nine months of 2019, and updates its strategy

Q3 2019 highlights:

  • Revenue of EUR 117.4m was EUR 36.7m higher than in Q3 2018 due to
    • recognition of a large order signed with an Asian investment company in December 2018 that met revenue recognition criteria in July 2019,
    • solid additional license sales, including one large conversion from perpetual license to subscription license, and
    • signing of two new subscription-based agreements, one SimCorp Dimension and one SimCorp Coric.

    Revenue increased by 45.5% compared with Q3 2018, and measured in local currencies, the increase was 43.1%. Organic growth was 40.8%.

  • EBIT was EUR 35.2m and EBIT margin was 30.0% compared with EBIT of EUR 15.1m and EBIT margin of 18.8% in Q3 2018, primarily driven by timing of license recognition. Measured in local currencies EBIT margin was 29.3%. Organic EBIT margin was 30.6%.
  • The acquisition of AIM Software came into effect on August 1, 2019. For the two following months, revenue from AIM Software (renamed SimCorp Gain) was EUR 1.8m. EBIT impact was negative by EUR 0.8m. The enterprise value was EUR 60.0m and the purchase price EUR 62.9m. The net aggregate fair value of identifiable assets and liabilities measured is preliminarily determined to be EUR 30.2m, and goodwill of EUR 32.7m.
  • Order intake was EUR 19.1m, an increase of EUR 4.4m or 30% compared with Q3 2018.
  • The latest version of SimCorp Dimension (version 19.10) was released in October. It introduces a number of new modules and enhancements across the system, including a cloud-based solution for the new Securities Finance Transaction Reporting (SFTR) regulation, which comes into effect in April 2020.
  • SimCorp has won the Waters Technology awards for ‘Best Client Reporting Platform’ (SimCorp Coric) and, for the 6th year running, ‘Best IBOR Platform (SimCorp Dimension)’.


9M 2019 highlights:

  • Revenue was EUR 326.7m, an increase of 28.9% when compared with the first three quarters of 2018. Measured in local currencies, SimCorp achieved revenue growth of 26.8% in 9M 2019 and organic growth of 26.1%.
  • EBIT was EUR 93.9m compared with EUR 52.5m in 9M 2018. EBIT margin was 28.7% compared with 20.7% in 9M 2018, primarily driven by license revenue growth from new client agreements. Measured in local currencies, EBIT margin was 28.2% and organic EBIT margin was 28.7%.
  • Net profit was EUR 72.6m compared with EUR 39.3m in 9M 2018.
  • Order intake was EUR 63.1m, an increase of EUR 18.2m or 41% compared with 9M 2018. Seven new SimCorp Dimension and three new SimCorp Coric license deals were signed.
  • At September 30, 2019, the order book amounted to EUR 35.0m, a decrease of EUR 10.5m compared with the order book at year-end 2018, due to the revenue recognition of the large new license agreement with an Asian investment company, signed in Q4 2018.
  • Free cash flow was EUR 66.0m compared with EUR 64.3m in 9M 2018.
  • SimCorp entered Q4 2019 with EUR 399m of the full year’s revenue signed, an improvement of EUR 78m or 24.3% compared with same time last year.

Strategy:

  • SimCorp has completed a comprehensive strategy review. With our updated strategy, we enter a new phase in the evolution of SimCorp, through which we will transition to a cloud-based, everything-as-a-service (XaaS) leading global provider of integrated front-to-back, multi-asset, investment management solutions.
  • Based on evolving client needs, the current business environment and the successful execution of our strategy, SimCorp’s ambition is to generate long-term, double-digit, annual revenue growth and improve our profitability margin. There will be fluctuations in both revenue growth and profitability margin from year to year due to timing of orders and investments.

Financial guidance 2019:

  • SimCorp maintains its full year 2019 expectations for revenue growth measured in local currencies of 12%-17%, and for EBIT margin measured in local currencies of 25.0%-28.0%. The full year revenue guidance includes approximately 1% related to the acquisition of AIM Software (previously approximately 2%) and the full year 2019 EBIT margin guidance includes approximately 1%-point negative impact from the acquisition of AIM Software (previously also negative 1%-point).

Klaus Holse, SimCorp CEO comments: “Our performance for the first nine months of the year has been solid. With a total of ten new clients, our order intake at this point is higher than in previous years. We are pleased that we have been able to have a larger part of the full year result materialize earlier than in past years.

We are very excited to start executing our updated strategy. It sets the direction for SimCorp’s future, with the aspiration of being the leading global provider of integrated front-to-back, multi-asset, investment management solutions. As key strategic drivers for future growth, we will gradually transition to a cloud-based as-a-service company, open up a wider ecosystem of solutions around SimCorp Dimension, and strengthen the outcomes we deliver to enable our clients’ success.

Download the full Q3 2019 interim report

Investor presentation

SimCorp’s Executive Management Board will present the report at a conference call on Friday, November 15, 2019 at 11:00 am (CET). Please use any of the following phone numbers to dial in to the conference call:

From Denmark: +45 3272 8042
From USA: +1 631 510 7495
From other countries: +44 (0) 2071 928000
Pin code to access the call: 8785358

At the end of the presentation there will be a Q&A session.

It will also be possible to follow the presentation via this link:
https://edge.media-server.com/mmc/p/csjtijo7

The presentation will be available prior to the conference call via SimCorp’s website
http://www.simcorp.com/en/about/investor/presentations-and-events/quarterly-and-annual-investor-meetings.

The Annual Report 2018 is available via this link
https://www.simcorp.com/annual-report-2018

Enquiries regarding this announcement should be addressed to:
Investor contacts:

Klaus Holse, Chief Executive Officer, SimCorp A/S (+45 3544 8802, +45 2326 0000)
Michael Rosenvold, Chief Financial Officer, SimCorp A/S (+45 3544 8800, +45 5235 0000)
Anders Hjort, Head of Investor Relations, SimCorp A/S (+45 3544 8822, +45 2892 8881)

Media contact:

Anders Crillesen, Group Communications Director, (+45 3544 6474, +45 2779 1286)

Company Announcement no. 42/2019